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Hybrid-Electric HMMWV Completes Cross-Country Driving Tour of United States

17 April 2000

Hybrid-Electric HMMWV Completes Cross-Country Driving Tour of United States

    SAN MARCOS, Texas--April 14, 2000--Electrosource Inc. (Nasdaq:ELSI) ("the Company") today announced its participation in the successful completion of the first trans-U.S. driving tour in a hybrid-electric military vehicle.
    Electrosource provided the battery component of the hybrid-electric power train developed by PEI Electronics Inc. ("PEI") of Huntsville, Ala. for the High Mobility Multipurpose Wheeled Vehicle ("HMMWV") completing the tour.
    "We are pleased at the successful outcome of this event and very proud to be part of the PEI hybrid-electric HMMWV team," said B.E. Jay, Electrosource President and CEO.
    "Participating in this challenging tour with PEI provided an unparalleled opportunity for the Company to evaluate its battery performance on the road, where it counts the most. We look forward to continued success with PEI on this exciting, groundbreaking project."
    The following is based on hybrid-electric HMMWV information provided by PEI in their announcement released last week.
    On April 3rd, a new hybrid-electric-powered High Mobility Multipurpose Wheeled Vehicle (HMMWV) completed its coast-to-coast driving tour of the United States. Starting on March 15th, at the base of the nation's capitol building, this high-performance prototype vehicle accumulated 3,256 road miles while consuming less than one-half the fuel required by a conventionally-powered HMMWV. During the tour, the vehicle visited several cities, including Detroit, Chicago, Denver, Reno and Sacramento, completing its trip at the base of the Golden Gate bridge at the Presidio in San Francisco.
    This coast-to-coast endurance trip was the first of a series of performance tests and evaluations to be conducted on this new breed of hybrid-electric military vehicle before initiating efforts to put the vehicle into full production. Ultimately, it is anticipated that this program will lead to adoption of this technology by the U.S. Army, other governmental agencies and by commercial and industrial organizations throughout the United States.
    The PEI hybrid-electric power train consists of a small 1.9 liter diesel-fueled 55 kW electric generator, a high-performance storage battery and a sophisticated power-management system. The efficient, low-emission diesel-powered generator is the primary power source. The battery provides silent traction power and both delivers and absorbs pulsed power when required. This auxiliary power capability significantly enhances vehicle acceleration and braking, fuel economy and functional versatility.
    Installed in the HMMWV, PEI's advanced power-train system offers the Army a host of performance enhancements that will dramatically improve rapid and strategic deployment and support of our Armed Forces. Fuel economy of the hybrid-electric vehicle is improved up to 15 miles per gallon, twice that of the conventional HMMWV. This feature alone will have an enormous impact on the Army's ability to deploy and support such vehicles in the field while significantly reducing operational costs.
    At typical convoy speeds, the hybrid-electric HMMWV can travel up to 375 miles on a single 24-gallon tank of diesel fuel, taking full advantage of the hybrid-vehicle's increased fuel economy. Vehicle top speed exceeds 70 mph. It can climb a 60% grade at more than 15 mph while carrying a full payload.
    The advanced lead-acid battery pack provides the high levels of power necessary to accelerate the vehicle and its 3,000 pound payload from 0 mph to 50 mph in only 10 seconds -- one-half the time required by the standard vehicle. Two 125 hp brushless DC motors -- one for each axle -- power the vehicle and provide extremely high mobility and performance both on- and off-road over rugged terrain and in the poorest of soil conditions.
    The enhanced functional versatility provided by the hybrid-electric drive system improves vehicle survivability and the probability of mission success. Operating in its "electric only" mode when the generator engine is off, vehicle performance of silent or "stealth" missions is greatly improved. In this mode, the vehicle can remain on station for extended periods, powered solely by the battery component of the hybrid-electric power train. In its "mobile-generator" mode, the vehicle also can be used effectively anywhere to supply large amounts of electrical power for a wide variety of missions that normally require large, dedicated generators. This multi-mode capability reduces the complement of equipment that must be deployed with troops and adds significantly to the effectiveness, versatility and deployability of the force.
    The hybrid-electric HMMWV program was initiated in 1992 under a cooperative research and development agreement between PEI Electronics Inc. and the U.S. Army's Tank-Automotive and Armaments Command in Warren, Mich. The first hybrid-electric HMMWV, a tactical grade vehicle with independent wheel drives that develop a total of 320 Hp, was completed in December 1997 under a cost-shared activity with the U.S. Army's Advanced Research Projects Agency ("DARPA"). The vehicle used for the cross-country tour was developed under internal PEI funding. It utilizes the same concepts of the four-motor tactical configuration but reduces the number of motors used from four to two (one motor for each of the two axles) to give a total horsepower of 225 Hp.
    With the completion of the cross-country tour, the hybrid-electric HMMWV will now travel back to Carson City, Nev. where it will undergo extensive testing at the Nevada Automotive Test Center. Upon completion of these tests, additional development work will be conducted to bring the vehicle's design up to full military specification compliance.
    PEI has already initiated production of its hybrid-electric power train for use in commercial and industrial applications where the benefits of lower fuel economy, extremely low exhaust emissions, low audible noise and high operating performance are manifest. This "dual use" of technology is a significant benefit to both military and commercial markets as a means of controlling both development and production costs.
    The development team consists of:
    PEI Electronics Inc. in Huntsville, Ala., listed as the Prime Contractor, system integrator and supplier of power train electronic equipment.
    McKee Engineering in Lake Zurich, Ill., listed as the Mechanical Designer and vehicle structures modifier.
    Electrosource Inc. in San Marcos, Texas, listed as the supplier of Horizon(R)Advanced Lead Acid Batteries.
    Unique Mobility in Golden, Colo., listed as the supplier of Drive Motors, Generator and related Controllers.
    Electrosource is a manufacturer of high-performance, light-weight batteries for use in electric and hybrid-electric vehicles, engine-starting, and telecommunication stand-by power applications. Additional information about the Company and an expanded text press release with photos may be found on its Web site, www.electrosource.com.

This release contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed in this release. Risks include financial risks, development risks, manufacturing risks, uncertainty of market acceptance, delay in shipment or cancellation of orders, customer reorganization, as well as other risks that are detailed from time to time in the company's Securities and Exchange Commission filings.